Liquidity Management
Gamma
DeFiFoundry
50,000 USDC
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Submission Details
Severity: medium
Invalid

Temporary DOS After Liquidation Execution

mohitisimmortal

Summary

After a liquidation event, the protocol’s afterLiquidationExecution() function sets depositPaused = true and does not automatically reset it. Although the owner can later unpause deposits via setDepositPaused(), this creates a temporary DoS condition for deposits during market extremes. Such conditions are precisely when new deposits could help capture market opportunities, leaving users reliant on owner intervention to resume deposits.

Vulnerability Details

After gmx makes a liquidation then protocol’s afterLiquidationExecution() function sets depositPaused = true but never sets it to false(not in any next actions too).

function afterLiquidationExecution() external {
if (msg.sender != address(gmxProxy)) {
revert Error.InvalidCall();
}
​
@> depositPaused = true;
uint256 sizeInTokens = vaultReader.getPositionSizeInTokens(curPositionKey);
if (sizeInTokens == 0) {
delete curPositionKey;
}
​
if (flow == FLOW.NONE) {
flow = FLOW.LIQUIDATION;
nextAction.selector = NextActionSelector.FINALIZE;
} else if (flow == FLOW.DEPOSIT) {
flowData = sizeInTokens;
} else if (flow == FLOW.WITHDRAW) {
// restart the withdraw flow even though current step is FINALIZE.
nextAction.selector = NextActionSelector.WITHDRAW_ACTION;
}
}

In extreme market conditions, liquidations may be frequent. While pausing deposits might be a safety mechanism, it inadvertently creates a state where, after liquidation, new deposits are blocked until the owner intervenes manually. This not only delays the ability to capitalize on market recoveries but also increases centralization risk, as it forces users to depend on the owner’s availability.

Impact

  • Temporary DOS of deposits.

  • Centralization: Users lose autonomy as deposit resumption relies solely on the owner's action.

  • Opportunity Loss: In volatile market conditions, delays in unpausing deposits could result in significant profit opportunities being missed.

Tools Used

Manual Review

Recommendations

Add depositPaused to false in next actions.

Updates

Lead Judging Commences

n0kto Lead Judge 9 months ago
Submission Judgement Published
Invalidated
Reason: Design choice

Appeal created

mohitisimmortal Submitter
9 months ago
0xl33 Auditor
9 months ago
n0kto Lead Judge
9 months ago
n0kto Lead Judge 8 months ago
Submission Judgement Published
Invalidated
Reason: Design choice

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